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April 16, 2021

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Digital currency set to revolutionize how we pay for goods, services

By Zhu Shenshen | 00:18 UTC+8 April 16, 2021 | Print Edition

SHANGHAI is speeding up pilot work and development of China’s new e-yuan, which has become a key element in the city’s drive to transform itself into global financial hub, Deputy Mayor Wu Qing said last week.

China is positioning the e-yuan for international use, challenging the US dollar’s dominance in the global financial system.

The e-yuan will be critical in helping Shanghai to develop its financial technology prowess, Wu added.

New technologies and applications, like artificial intelligence, the cloud and the blockchain system used by the e-yuan, will reshape both the financial industry and people’s daily lives, said Zhang Lijun, a partner at PriceWaterhouseCoopers (PwC).

Besides banks, the e-yuan will change the payments and mobile-phone industries, which are frontline sectors in the digital infrastructure that can be adapted to the People’ Bank of China’s new e-yuan.

Financial services platform Lakala Payment said it plans to invest 500 million yuan (US$76.9 million) in the next three years on the e-yuan system and infrastructure upgrades.

The Shenzhen-listed company said it can already offer “full-range” e-yuan transaction and payment services. It said it has established a special team to oversee e-yuan research, product development and operations.

Another payments provider, Shanghai-based Huifu, has signed agreements with “several domestic banks” related to providing e-yuan services.

Huifu said the agreements are line with the e-yuan becoming fully accepted in both online transactions and offline point-of-sale machines, serving “tens of millions” of smaller merchants across the country.

Working together, banks and payments firms will complete the e-yuan industry chain, covering security encryption and certification, bank information-technology architecture, online payment gateways, and payment terminals support, such as ATM machines.

Technology company Huawei has offered a hardware “digital wallet” for the e-yuan in its flagship phone model, the first in its kind among major Chinese vendors. It allows users to open and update an e-yuan wallet online after the central bank fully launches the new digital currency.

The tech giant will probably expand the e-yuan wallet to all future phone models after receiving a payments-service license recently.

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